Personal insolvency legislation key step in solving mortgage debt crisis

Local Fine Gael TD and Minister of State Brian Hayes, has said that the Personal Insolvency Bill published yesterday (Wednesday) is a key step in solving our mortgage debt crisis. The Heads of the Bill have been published by the Minister for Justice, Alan Shatter, and the Minister for Finance, Michael Noonan.

“This draft Bill puts forward a range of options that will provide much needed relief for those struggling with personal debt. This is an extremely complex area and one of national importance; the challenge of getting to grips with the mortgage problem is one of the biggest issues facing this Government. What we have today is a series of solutions, which will form a key part of the Government’s strategy for dealing with mortgage arrears.

“The write-down of small debts, up to the value of €20,000, will be made possible through the issuance of Debt Relief Certificates. This will essentially function as a six year deal with the lender, where the person in debt can be discharged from loans they are unable to pay. For those with larger personal debts, a Debt Settlement Arrangement may be agreed, which also allows for the write-down of personal loans.

“These two schemes will directly help the thousands of people in this country who have found themselves drowning in debt in recent years – with credit card bills, car loans, overdrafts – and are currently unable to chart a way out of their situation. By helping these people, we may be able to avoid further mortgage defaults and the unsustainable escalation of personal debt.

“For those struggling under the burden of spiralling mortgage debt, the new Personal Insolvency Arrangements contained within the Bill will provide a lifeline. Through agreement with creditors, the PIA will help mortgage holders to restructure their debts and ultimately reduce their repayments.

“The final, crucial, element of this legislation is the reformed bankruptcy arrangements, which reduce the period of time that a person will be considered bankrupt from 12 to 3 years. The existing regime is punitive and out of date. Bankruptcy should always be considered a course of last resort. However, for those who find themselves with no other option, this proposed new legislation will make the process quicker and easier.

“This Bill is an excellent start; it will now go before the Joint Oireachtas Committee on Justice for its consideration and it’s hoped it can be published in full by the end of April. Between now and then, the Government wants to hear the views of the Opposition and the public. This Government is determined to chart a way out of this crisis by helping people who are feeling overwhelmed by debt to get back on their feet.”

St Killians Dail Visit 25th January 2012

Today the 6th classes from St Killians Senior School visited Leinster
House. This has become an annual event for 6th class each year. The 53
students learned of the history of Leinster House and saw both the Dail
and Seanad in session. My thanks to the teachers for bringing the
students in.

Irish Independent 25th January 2012 (Article by Brian Hayes published today)

Brian Hayes: We are ruining ourselves with new-bailout talk

Obsessing about a second bailout for Ireland at this stage is a useless form of activity. In fact, talking about a second bailout at the beginning of 2012, with two years to run in the present support programme, is a form of displacement activity. It plays to our weaknesses — our sense of pessimism and victimhood.

A much more effective strategy is to ignore the Cassandras and get on with the job of turning this economy and country around. We need to focus on the here and now; on what we can do in 2012 to make things better.

At present the troika and Ireland share a common interest. Both sides are anxious to show that a country can successfully complete and exit a support programme.

During 2011 the Government negotiated significant changes to the current programme. It is currently involved in complex negotiations over the overall burden of debt being imposed on the Irish taxpayer, particularly as regards promissory notes to the former Anglo Irish Bank. For Ireland now to say it wants another bailout would be throwing away its strongest card in the present negotiations.

It would fatally undermine our position. There would be no incentive for the troika to change the terms of the current programme.

There is also another reality. We live in uncertain times. In fact all predictions about 2012 could be derailed by geo-political events. Take for instance the escalating crisis with Iran. An outbreak of hostilities with Iran would have consequences that nobody can foresee but most of them are likely to be bad. Predictions by economists are just that, predictions.

No economist, no commentator knows what the situation will be like in the eurozone in three months, let alone what the international situation will be like at the end of 2012.

We need to focus on what we can do for ourselves. That means getting our spending and revenues into balance, the quicker the better. This will stop our debt mountain growing and interest repayments escalating.

In all the debate about deficit reduction there has been no reference to the issue of inter-generational equity. Borrowing for current spending is in effect taking resources from our children. They are the ones who will have to pay back our debt and the interest on it.

Nobody owes us a living. Ireland is a small open economy. Prosperity depends on our capacity to sell goods and services at home and abroad. Being competitive, an emphasis on quality and customer service and innovation are essential. The Government continues to concentrate on jobs and supporting growth areas of the economy. The Government is also trying to fix broken sectors of the economy such as the property sector and issues surrounding personal insolvency.

On the international stage we have gone a long way towards rebuilding Ireland’s reputation. During 2011 the Government fought off a sustained attack on our corporate tax rate. We also negotiated significant changes to the bailout programme, which has saved €10bn in interest repayments.

Sorting out our national finances, carrying through a major public sector reform programme, creating the conditions which allow the economy to grow, fixing the broken parts of the economy — are all necessary ingredients behind getting the country to a better place.

There is reason to be hopeful that a measure of stability will return to the eurozone this year. The decision by the ECB to provide unlimited funding at 1pc to all European banks was a significant game changer.

If stability returns to the eurozone and Ireland continues to fulfil the terms of the support programme then there is every prospect that Ireland will be able to raise money on the international markets in 2013.

The terms and conditions are the critical elements of any borrowing programme. To coin a phrase: sufficient for the day is the need thereof. We need to focus on what we can do for ourselves. An approach informed by realistic optimism will serve us much better than pessimism or victimhood.

Brian Hayes is Minister of State at the Department of Finance and a TD for Dublin South-West

Pat Kenny Radio Interview Tuesday 24th January 2012

Bank Rescue Package

The government has rejected the notion of defaulting on any of the money the State has borrowed to recapitalise our banks. But it has repeatedly signalled that it will seek easier repayment terms. Our debts will figure large in talks Finance Minister Michael Noonan is attending in Europe today. This morning he meets EU economics commissioner Olli Rehn in Brussels; later , in Frankfurt, he’ll be talking to ECB chief Mario Draghi. Meanwhile Minister Noonan’s colleagues are meeting today to discuss ways of getting the Eurozone back on the ‘road to rectitude’, as Irish Times Europe correspondent Arthur Beasley puts it.

He spoke to Pat this morning. Also debating the issue was Minister Of State at The Department Of Finance Brian Hayes and in studio Independent TD Stephen Donnelly.

Click below if you would like to listen to the Show.

http://www.rte.ie/radio1/todaywithpatkenny/2012-1-24.html

Guinness World Record Attempt 15th February Tallaght Stadium

Local Fine Gael TD and Minister of State Brian Hayes is urging the local Tallaght Community to get involved in the Guinness World Record attempt for most penalty shots in Tallaght Stadium on February 15th.

Minister Hayes said, “This is a great event to have happening in our area. It is been organised by the Collage Football Association, the FAI and IT Tallaght and being supported by many local businesses and community organisations. Last week I took part in the official launch with John Delaney of the FAI.”

Minister Hayes continued, “There is a great atmosphere amongst the organisers and      a strong belief that they can succeed. The current world record was set last year in New York with 742 shots and the aim on the 15th is to reach 1000. There are strict rules however with only each person being allowed to take one shot and each shot must be taken      within 30 seconds.”

Minister Hayes      concluded, “To date a number of schools have signed up to      participate but the strict timing means that from the starting time at 8:30am a penalty shot has to be taken every 30 seconds.  For this to succeed participants are needed and I encourage everyone to register on www.charitypenaltykick.org.”

Pat Kenny Radio Interview Friday 20th January 2012

Pat Kenny was joined by myself, Brian Hayes TD, Minister of State at the Department of Finance and Dara Calleary, Fianna Fáil spokesperson on Justice, Equality and Defence.

Click below if you would like to listen to the Show.

http://www.rte.ie/radio1/todaywithpatkenny/2012-1-20.html

Lending to the real Economy in 2012 Crucial for our Recovery

LENDING TO THE REAL ECONOMY IN 2012 CRUCIAL FOR OUR RECOVERY

 

Speech by Brian Hayes TD, Minister of State at the Department of Finance at the IBF Conference shaping the Future Mortgage Market,

Wednesday January 18th

Introduction

The residential property market in Ireland is in a dysfunctional state.  Since taking office this Government has taken two very significant initiatives to return the property market and the property industry to a more normal state.

The banking announcement on 31^st March 2011 restructured the core banks to ensure that there is over €20 billion of new mortgage and SME lending available from the pillar banks between 2011 and 2013.  Bank of Ireland has already announced a special fund for new buyers and I understand that others are considering launching mortgage initiatives shortly.

Last month’s budget introduced measures to assist the property sector at its core.  These measures were designed to foster greater certainty/confidence about the future of the property market.  The creation of confidence in this sector and the availability of credit is vital to return the property market to a more normal market. The challenge now to the banks is to make mortgage credit available to allow people to avail of the Budget incentives as announced.

Nobody wants a return to the excesses of the wild years – the toxic brew of crazy borrowing by developers, the mad and bad lending by banks, the poor to non-existent bank regulation and worse politics.

It might have been a great party. But it sure left this country with a hell of a hangover that will take some time to resolve.  However it is in the national interest that we have a functioning property market, both residential and commercial. By that I mean a market with a reasonable level of transactions and a return to a sensible level of new developments.

A market that functions like a yoyo is in nobody’s interest. I appreciate that the residential property mortgage market is a complex mix of product types. While all the talk has been of arrears, people on tracker mortgages have benefited substantially in recent years as euro zone interest rates have fallen to record low levels with a further reduction possible or even likely in 2012. Of course the same tracker mortgages products are part of the problem facing lending institutions.

As Government we are acutely aware of the difficulties currently facing many mortgage holders.  We have kept our promise. We have stayed engaged in finding practical solutions to what are very real problems.

The measures include a strong Code of Conduct on Mortgage Arrears by the Central Bank and a formal Mortgage Arrears Resolution Process. The government has moved to help people who have become unemployed and are in serious difficulty with their mortgage payments. The Department of Social Protection Mortgage Interest Supplement Scheme provided funding of the order of 75million euro.

The government has also insisted that people on local authorities mortgages benefit from interest rate reductions. And as the banks know, we have adopted a muscular approach with you on passing on interest rate reductions.

Last year the government also established the Keane Group to look at the increasing problem of mortgage arrears. That committee reported in October and the government has moved quickly to implement some of the recommendations. We are committed to advancing further proposals in the early part of this year to help those caught up in the appalling situation and are working at a cross departmental level to achieve this.

The debate in both houses of the Oireachtas and the submissions received from outside groups are helping form the response of Government. This year, as a matter of priority, the Government will also introduce a new bankruptcy and personal insolvency law.  This is a reform long overdue and absolutely essential in creating an even pitch between lenders and borrowers.

The government of course is a strong player in the rental sector. The Department of Social Welfare is spending of the order of 500 million euro a year on rent supplements for social welfare recipients. Critically the Government has recapitalised the domestic banks and in that recapitalisation, provision was made for possible losses on the mortgage book. It is now up to the banks that the Government has recapitalised and indeed the other mortgage providers to work closely with the Central Bank and move quickly on a case-by-case basis with people in difficulty.

In the December Budget, the Government kept its promise to those in negative equity, to those who bought in the period 2004 to 2008. We increased mortgage interest relief to this group as promised.

As regards residential property prices we all know they continued their steep decline in 2011. As we know trying to catch a falling knife is always dangerous. Nevertheless the relationship between average incomes and average house prices and interest repayments on a fixed interest mortgage is now in better balance.

In fact in some parts of the country house prices are below current replacement costs, which is an indicator that values might have fallen below reasonable long-term value. In order for recovery to happen it is important that the market has reached the bottom, I hope that will be in 2012.

In the December budget, the government did provide a strong incentive to first time buyers to enter the market in 2012. This will help a little. But restoring the residential property market to a better place will depend on that elusive potion. Confidence. Stability in the euro zone and a return to growth and employment in the Irish economy will be important in restoring confidence.

Availability of finance is also a critical element. After the trauma suffered by the banks in recent years and the real problem of mortgage arrears there may well be reluctance by the banks to issue new mortgages.

But credit is the lifeblood of an economy.  While the bank recapitalisation exercise is of course about repairing the balance sheets of the banks, it is also about improving credit and getting lending out to the real economy. For the domestic banks that were part of this exercise the State has provided the capital and there is a need for the banks get lending going again on a responsible basis.

In the interest of future stability we also need to look at best practice in the provision of mortgage finance.  Is it wise for instance to have variable interest rates for a principal private residence? Would it not be wiser to insist on fixed interest mortgages in this specific sector? We also need to look at the provision of third party guarantees. Such guarantees were certainly a distorting factor in recent years. Insisting on a reasonable deposit also contributes to stability. There is the big question on whether some residential mortgages should be on a non-recourse basis only. Introducing such a provision would have a dampening effect on lending but it would also inhibit reckless lending.

And there are also wider social policy issues. In a world where the nature of employment is changing at a rapid pace we do need a major debate on Ireland’s great love that is never afraid to speak its name – Ireland’s love affair with home ownership and property. As a matter of policy we need to develop a vibrant rental sector with strong protection for tenants and which will be attractive to companies and institutional investors seeking long-term returns.

To conclude, the government will stay involved with the property sector, particularly the residential sector. We will do so because an active property market is good for the economy. Above all we will stay engaged because the residential property market is also about peoples’ homes. And homes are essential to stable social relations. Homes are about peoples’ lives and their dreams. Minimising the number who will actually loose their homes is the key objective for this administration and working up solutions to bring that about is what we are about.

Video at Tallaght Stadium for Launch of CFAI’s Guinness World Record Attempt

Video at Tallaght Stadium for Launch of CFAI’s Guinness World Record Attempt

Click on the link to view it:

CFAI Announce It Will Attempt To Break Guinness World Record For Consecutive Penalties

I had the pleasure of attending the Launch of this Guinness World Record attempt yesterday in Tallaght Stadium.

The event is an attempt to break the Guinness World Record Attempt for the most number of penalty kicks. It is been organised by College Football Association in partnership with IT Tallaght. The FAI is also supporting the event. The current record is 742 set last year in New York.

The event will take place on Wed 15th Feb in Tallaght stadium. Over the coming weeks they will be recruiting people of all ages to participate.

Rules only allow a person to take one kick and each kick must be taken within 30 secs. People can register at http://www.charitypenaltykick.org/

Trim Chamber of Commerce Speech

Speech by Brian Hayes TD, Minister for State at the Dept of Finance, speaking at the annual Trim Chamber of Commerce dinner Friday 13th Jan.

No one owes us a living – playing the blame game will do nothing for Ireland — Hayes Thank you for your invitation to speak at the Trim Chamber of Commerce annual dinner. As Minister responsible for the OPW, we have a very special relationship with Trim given the fact that the HQ of the OPW is based here in Trim. When times are tough there is a temptation to wrap the comfort blanket of victim hood tightly around us. We must resist that temptation. Victim hood is not a very useful response to the political and economic challenges now facing our country. Yes we are in the middle of an international economic storm. Of course the uncertainty over the Euro is making our situation difficult to chart a way back. But 80% of the crisis we face is all of our own making and can only be fixed by decisions we take. Blaming the IMF or the European authorities is a pointless exercise in victim hood. Without the availability of funding from them, we would have to align our revenues and spending virtually right away. Stripping out money set aside for the banking system, the gap between Exchequer revenues and spending this year will be close to 15 billion euro, giving an indication of the difficulty of that task. Can people even begin to understand the impact of cutting the voted expenditure of Government Departments and agencies on social protection, health services and so on by between 25 and 30 per cent in one year to close this gap between income and expenditure. Because that’s what we are talking about.

Those who argue that we should say good-bye to the troika are intent upon bringing about a nuclear winter to this country. Presenting us as victims either at home or abroad can be self-fulfilling. The better response to a national crisis is to get back up and get into fight back mode. Of course there are constraints. Nevertheless each and every one of us has the capacity to make a difference. As a country we still have choices to make and the freedom to make those choices. I do not underestimate the challenges facing us. In November 2010 Ireland was battered and bruised and on the ropes. At that stage outside assistance was necessary. And let us be absolutely honest about the situation. In November 2010 there were no private investors willing to lend to the Irish government or to the Irish banks at affordable rates. Without the bailout programme and the ongoing support of the ECB the Irish banking system would have totally collapsed and government finances and the Irish economy would be in complete meltdown. The European Union, the ECB and the IMF are providing critical support to the Irish government and the banks and giving this country the time, the means and the opportunity to sort out our problems. They have been open to discussion and reasoned arguments. The goal of the Programme is to get Ireland and the banks back to the market and out of the programme and all parties are committed to ensuring that the appropriate measures are taken in the future and are confident that the objectives of programme will achieved. Since it came into office, this Government has taken every opportunity to seek ways to enhance the terms of the programme and to reduce the burden of debt on the Irish people. Most notably, the Government, with the assistance of the Troika and other member states, has successfully reduced the cost of the EU funding to Ireland leading to a savings of some €10 billion

Only a few weeks ago the ECB gave three-year money at 1% interest to all European banks, including Irish banks. This was one of the key demands of the government. This long term funding allows the banks to do what banks are supposed to do – provide credit to existing businesses and new start-ups. Intense and robust negotiations continue with the troika on many aspects of the programme, including in relation to the ongoing cost of funding and restructuring of the banking sector. As stated by the Taoiseach in the Dail during the week technical discussions are ongoing between officials in this area. Bringing this country to a safer, better place will be no easy job. Success will depend on our capacity to turn the economy around. The Government is focused on the real task of restoring sustainability to our public finances, repairing our banking system and generating economic growth. We have had a measure of success last year. As the Taoiseach said yesterday in London, our focus must now be on growth at home and abroad. Despite the adjustment last year of 6billion euro the economy grew for the first time in three years. That was led by Exports recovering. In the Agri/Food sector, in tourism and the IDA has its best year for a decade in attracting new investment – 168 projects in all. The IT sector is very dynamic with all the big names now having a presence in Ireland. We live in a tough, competitive world. Nobody owes us a living. Our prosperity depends on our ability to sell goods and services at home and abroad. We must stay competitive in the areas of cost, quality, customer service and innovation. The government has a clear focus on supporting the export sector and SMEs. In the budget we introduced significant new support for business wishing to grow their exports in new markets. The Minister for Enterprise and Jobs, brought forward a range of measures to support SMEs and job creation. Initiatives include a partial loan guarantee scheme, a Micro Finance Start-Up Fund, seed and venture capital initiatives. Further initiatives will follow in the near future. The property sector is a critical sector of any economy. Nobody wants a return to the crazy years – the toxic mix of greedy developers, mad lending by the banks, poor banking regulation and even worse politics.

However it is in the national interest that we have a functioning property market, both commercial and residential. A property sector with a reasonable level of transactions and some new development is required. In the recent budget the government introduced a number of targeted measures to support the property market. These measures by themselves are not sufficient to jump-start the market. Availability of finance is also critical to a well functioning property market. The banks have a clear responsibility in this regard. The banks have been well capitalised by the government and must now focus on lending money into the Economy. Mortgage interest relief for first time buyers has been extended into 2012. While family homes are now very affordable many potential buyers may struggle to receive mortgages. The government has set mortgage lending targets for the covered banks and will ensure that banks are making credit available to people to buy their first home. There is a way out of this crisis. We can come back from the appalling mess we have been asked to clean up by the Irish People. But blaming others as some kind of default position is no answer to our predicament.